Katherine Ross

Tulip Trading must prove that it owned the bitcoins allegedly lost during a 2020 hack, a new application with the UK’s high court argues.&nbsp;



Tulip Trading, a holding company created by <a href="https://blockworks.co/tag/craig-wright">Craig Wright</a>, filed a lawsuit arguing that 12 Bitcoin Core developers had a “fiduciary duty…to recover the Digital Assets for it upon [Tulip Trading] asserting that it is their rightful owner.”



Tulip Trading sought to have the court declare it as the rightful owner of the bitcoins (<a href="https://blockworks.co/price/btc">BTC</a>), while also pushing for the developers to let it access the bitcoins through a “backdoor” in the Bitcoin Core software, or ensure a transfer of the bitcoins to an address that has accessible private keys.



<a href="https://bitcoindefense.org/wp-content/uploads/2023/07/2023.07.11-Elliss-1-Preliminary-Issue-Application-FINAL.pdf">Documents</a> claim that some of the developers “are no longer contributors to the Bitcoin Core software and some have ceased being contributors due to the burden of these proceedings.”



Around 111,000 bitcoins were allegedly lost in the attack, leaving the valuation of the bitcoins at around 4.5 billion euros, according to the court documents.&nbsp;



Lawyers for the developers <a href="https://bitcoindefense.org/developer-defendants-claim-tulip-trading-case-is-fraudulent-in-preliminary-issue-application/">argue</a> that Tulip Trading made a “deliberately” false claim of ownership.



In addition, “Wright’s case proceeds on the basis of a fundamental mischaracterisation of how Bitcoin works. Bitcoin is an open-sourced software project and the developers that contribute to it form part of a voluntary community of contributors that changes over time.”



The defendants seek to have Tulip Trading prove that it did own the bitcoins, arguing that proving the address ownership would save months of court proceedings. 



Last year, a <a href="https://blockworks.co/news/bitcoin-developers-do-not-have-a-fiduciary-duty-to-bitcoin-owners-judge-rules">judge ruled that developers did not have a fiduciary duty</a> to help Wright access the addresses containing bitcoins.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Don’t miss the next big story – join our <a href="https://blockworks.co/newsletter?source=end" target="_blank" rel="noreferrer noopener">free daily newsletter</a>.



Follow Sam Bankman-Fried’s trial with the <a href="https://blockworks.co/tag/sbf-trial">latest news from the courtroom</a>.

Tulip Trading made ‘deliberately false claim’ of BTC ownership, Bitcoin Core developers argue

Shalini Nagarajan

Macauley Peterson

Robinhood will no longer support the bitcoin fork favored by <a href="https://blockworks.co/tag/craig-wright">Craig Wright</a>, the Australian computer scientist who has claimed to be pseudonymous Bitcoin developer Satoshi Nakamoto.



The move has sent Bitcoin Satoshi’s Vision (<a href="https://blockworks.co/price/bsv">BSV</a>) crashing against BTC, the asset favored by the faction known as Bitcoin Core — but more often as, simply, bitcoin.



In an <a href="https://robinhood.com/us/en/support/articles/bitcoin-sv-update/">update</a> to users on Wednesday, the trading app said it would end support for BSV on Jan. 25 as part of a routine review of its crypto products.



With some geographical restrictions, users can continue to trade the token until the deadline.



After entirely delisting the token, Robinhood will sell any remaining BSV for market value, and the proceeds will be credited to user accounts under available funds.



BSV rallied alongside BTC against the US dollar Thursday but is down against BTC to levels not seen since the FTX bankruptcy.



<figure class="wp-block-image"><img decoding="async" src="https://lh5.googleusercontent.com/TBrZLCVJq_G7Xwgs1o96fAVIsZFsZ3kQiczXPxYqA6jkPg5qjb57zH2vcV_WV8O-zYugkeZLh_ou1iqFE7-YfN2ySsD455PvvXkqnSpszNPAlIMeT1rhqRwyoe7jrWJw4ZbPXK3yGddpiHJ96q7--1eK-5yLhEELrQsHxwjZc3iLdXcbpLJtxTNze2x6Tw" alt=""/><figcaption class="wp-element-caption">BSV/BTC | Source: TradingView</figcaption></figure>



The latest development isn’t likely to settle any debates about the legitimacy of the crypto in the pantheon of bitcoin forks, but it does remove one of the few remaining venues where BSV can be traded against actual dollars, as opposed to Tether’s USDT. Of the latter, only OKX has significant volume — $17.5 million in 24-hour volume, <a href="https://www.coingecko.com/en/coins/bitcoin-sv#markets">per Coingecko</a>.



Robinhood didn’t provide a specific reason for delisting the token, but the trading app has a “rigorous framework” in place to regularly vet tokens on its platform.



Bitcoin SV was first included under Robinhood’s brokerage in November 2018 after it emerged from the hard fork of Bitcoin Cash (<a href="https://blockworks.co/price/bch">BCH</a>).&nbsp;



Proponents of Bitcoin SV believe that it aims to execute some of the features mentioned in Nakamoto’s <a href="https://bitcoin.org/bitcoin.pdf">white paper</a> that appear to be absent in the original Bitcoin blockchain.&nbsp;



Like its predecessors, Bitcoin SV uses a proof-of-work protocol to verify transactions and sports the same maximum supply of 21 million tokens.



It emerged from political clashes within the Bitcoin Cash community, a little over a year after BCH forked Bitcoin, ostensibly to improve upon the scalability of the protocol and reduce transaction fees which, at the time, were quite high.&nbsp;



Aside from Wright, Bitcoin SV is championed by Canadian entrepreneur Calvin Ayre, who has <a href="https://www.youtube.com/watch?v=_n6QvThlSaU">described</a> it as the most valuable network in the blockchain space. Ayre <a href="https://twitter.com/CalvinAyre/status/1613197890008281089">reacted</a> to Robinhood’s delisting of BSV as “meaningless.”&nbsp;



Wright meanwhile <a href="https://twitter.com/Dr_CSWright/status/1613206147573645313">described</a> the trading app as “dishonest,” saying “the last thing [Robinhood wants] is a system that stops their frauds.”



<h3 class="wp-block-heading">Wright and the future of his “creation”</h3>



Speaking of allegations of fraud, Wright <a href="https://blockworks.co/news/craig-wright-not-defamed-by-being-called-a-fraud-judge-rules">lost a Norwegian libel suit in October</a> that he launched against someone who called him just that for his unproven claims to be Satoshi.



A subsequent defamation suit against podcaster Peter McCormack <a href="https://www.judiciary.uk/wp-content/uploads/2022/12/Wright-v-McCormack-Final-Judgment-for-Hand-Down.pdf">ended in December</a> and also went against Wright, who was ordered to pay McCormack’s legal fees.



And in a blow to Wright’s Satoshi narrative, Justice Chamberlain — the judge that oversaw Wright’s case against McCormack — emphasized that it is “important to be clear that Dr. Wright has not established that he is Satoshi” — a detail not previously driven home <a href="https://blockworks.co/news/verdict-in-craig-wright-civil-trial-100m-award-for-plaintiff-but-no-punitive-damages">at Wright’s other trials</a>.



Justice Chamberlain also wrote that “Dr Wright had advanced a deliberately false case until shortly before trial,” adding, “When the falsity was exposed, he changed his case, explaining that he had made inadvertent errors. I rejected that explanation as untrue.”



In the aftermath of the ruling, Wright seemed to imply that he would back off on the idea of making his case to be Satoshi in court, instead appealing to the court of public opinion in a Twitter thread that <a href="https://twitter.com/Dr_CSWright/status/1605758679386492928" target="_blank" rel="noreferrer noopener">begins</a>, “One day, people will understand,” and <a href="https://twitter.com/Dr_CSWright/status/1605760216489897984" target="_blank" rel="noreferrer noopener">continues</a>, &#8220;I no longer care what you think. I care for my wife, my mother, and my family. I seek to see my creation used.&#8221;



On the other hand, his lawyers are still busy in the UK <a href="https://twitter.com/gonbegood/status/1600798376152686594">suing Bitcoin developers</a> to try to force them to help Wright gain access to Satoshi’s dormant bitcoins, which Wright claims were rendered inaccessible due to a case of lost <a href="https://www.blockworksresearch.com/glossary#public-key-cryptography-asymmetric-cryptography">private keys</a>. That case is awaiting a ruling on jurisdiction before possibly proceeding to try the merits of the legal claim on the facts.



Through all this, Bitcoin SV is still ranked the 52nd cryptocurrency based on its market capitalization of around $804 million as of Thursday at 2:30 pm ET, according to <a href="https://blockworks.co/price/bsv">data compiled by Blockworks</a>. The token lost as much as 15% on Wednesday before rebounding strongly today along with the rest of the crypto market <a href="https://blockworks.co/news/cpi-falls-in-december">following the CPI data release</a> by the US Bureau of Labor Statistics.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Don’t miss the next big story – join our <a href="https://blockworks.co/newsletter?source=end" target="_blank" rel="noreferrer noopener">free daily newsletter</a>.



Follow Sam Bankman-Fried’s trial with the <a href="https://blockworks.co/tag/sbf-trial">latest news from the courtroom</a>.

Bitcoin SV Plunges Against BTC After Robinhood Delisting

<div id="highlights-block_6352e4d8463b9" class="highlights">
 <ul>
 <li>Granath’s statements were primarily inoffensive value judgements, with “a core of allegations of a factual nature,” the Oslo court observed</li>
 <li>The court chose not to take a position on the question of whether Wright is Satoshi, calling it “unclear”</li>
 </ul>
 
</div>



Craig Wright hoped to convince the world that he is Satoshi Nakamoto, but his dream took a hit Thursday when a Norwegian judge ruled that public comments ridiculing Wright’s claims were not unlawful or particularly offensive.



Magnus Granath, a Norwegian known online under the pseudonym <a href="https://cms.blockworks.co/?s=Hodlonaut" target="_blank" rel="noreferrer noopener">Hodlonaut</a>, called Wright “a very sad and pathetic scammer” and “a fraud” in a series of March 2019 tweets. The tweets were deleted a few weeks later, but not before they raised the ire of the Australian entrepreneur, who has asserted <a href="https://bitcoinmagazine.com/business/op-ed-how-many-wrongs-make-wright" target="_blank" rel="noreferrer noopener">since 2015</a> — with scant evidence — that he is Satoshi, the pseudonymous writer of the Bitcoin white paper.



Wright’s lawyers threatened to sue in the UK, unless Granath acknowledged Wright as Satoshi. Instead, Granath, the plaintiff in the Norwegian case, sought a judgment that his tweets were justified.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I won. Welcome to law.&mdash; hodlonaut 🌮⚡🔑 🐝 (@hodlonaut) <a href="https://twitter.com/hodlonaut/status/1583086284792205312?ref_src=twsrc%5Etfw">October 20, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“Welcome to law,” is a reference to the closing line of <a href="https://archive.ph/xgeTI" target="_blank" rel="noreferrer noopener">Wright’s own 2019 screed</a>, when he vowed, “I am the person behind the moniker Satoshi Nakamoto, and as a result of all the trolls and haters, I’m going to provide evidence,” using “courts and law.”



At least one court has now declared the evidence still isn’t there. In the ruling by the Oslo District Court, Judge Helen Engebrigtsen concluded that Granath’s statements were not defamatory when weighed against his rights to freedom of expression.



“The court believes that Granath had sufficient factual grounds to claim that Wright had lied and cheated in his attempt to prove that he is Satoshi Nakamoto,” the ruling, <a href="https://www.docdroid.net/no5vRjP/translation-of-ruling-in-granath-v-wright-pdf#page=6" target="_blank" rel="noreferrer noopener">in translation</a> from Norwegian, states.



For years, Wright has purported to be the author of versions of the <a href="https://bitcoin.org/bitcoin.pdf" target="_blank" rel="noreferrer noopener">Bitcoin white paper</a> and the bitcoin code that predate the first known edition published by Satoshi in 2009.



Although the court cleared Granath of any liability for his statements and reviewed approximately 11,000 pages of documents, the judge was unwilling to rule on whether Wright was indeed the creator of Bitcoin.



<blockquote class="wp-block-quote">“Both parties in the case have pointed to circumstances that speak respectively for and against Wright being Satoshi Nakamoto,” Engebrigtsen wrote, adding, “The court chooses not to take a position on this, because it has no bearing on the outcome of the case.”</blockquote>



Courts have <a href="https://cms.blockworks.co/tag/craig-wright/" target="_blank" rel="noreferrer noopener">previously declined</a> to wade into the debate over Wright’s claim to the identity of Satoshi Nakamoto.



However, it was pertinent to the context around Granath’s tweets and, the judge wrote, “the court points out that the evidence brought in the case is not suitable to change the prevailing opinion that Craig Wright is not Satoshi Nakamoto.”



Wright was ordered to pay Granath’s legal fees amounting to about $385,000. Wright <a href="https://twitter.com/Dr_CSWright/status/1583122864336957441" target="_blank" rel="noreferrer noopener">tweeted</a> that he intends to appeal.



The lead attorney for Wright told Blockworks that they “do not agree with the court&#8217;s assessment that Granath’s communications were not defamatory in a legal sense,” noting that, “private citizens should enjoy the same protection on Twitter as on other media platforms.”



Wright, who lives in London, still has a pending defamation claim against Granath in England.



An attorney for Granath did not immediately return Blockworks’ request for comment.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Don’t miss the next big story – join our <a href="https://blockworks.co/newsletter?source=end" target="_blank" rel="noreferrer noopener">free daily newsletter</a>.



Follow Sam Bankman-Fried’s trial with the <a href="https://blockworks.co/tag/sbf-trial">latest news from the courtroom</a>.

Craig Wright Not Defamed by Being Called ‘a Fraud,’ Judge Rules

<div id="highlights-block_6241d462f69f9" class="highlights">
 <ul>
 <li>Wright’s claim to be Satoshi Nakamoto was not at issue in this case</li>
 <li>The judge ruled that developers have no fiduciary duty to bitcoin owners</li>
 </ul>
 
</div>



Craig Wright, who claims to be Bitcoin creator Satoshi Nakamoto, suffered a new legal setback as a London court <a href="https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2022/667.html" target="_blank" rel="noreferrer noopener">ruled</a> developers have no fiduciary responsibility to aid the Australian computer scientist in accessing two wallets containing about $3.9 billion in bitcoins. 



Wright, whose company Tulip Trading Limited (TTL) brought the litigation, said he lost his private keys following a hack, and wants Bitcoin developers to assist him in regaining control of the assets. Judge Sarah Falk of the London High Court turned down that notion Friday.&nbsp;



The 16 defendants are all developers of Bitcoin-related software, and 12 are Bitcoin Core developers, the chain widely regarded as the canonical Bitcoin, or BTC.&nbsp; Wright’s company also laid claim against developers of several forks: Bitcoin Cash, Bitcoin ABC and Bitcoin SV (the fork that Wright himself says is “Satoshi’s Vision”.)



Wright maintains the two Bitcoin wallet addresses are his, via a series of Seychellois and Antiguan shell companies and trusts for which he and his wife Ramona Ang are beneficial owners.



Wright contends he stored the private keys in a password-protected file, with backups on two cloud storage servers, but that both the file and its backups were removed or deleted in a hack prior to Feb. 8, 2020.



The assets have not moved since the time of the alleged hack. Wright wants Bitcoin developers to push through a software update that would restore his access to the wallets. In fact, he offered to pay them to do so.



<blockquote class="wp-block-quote">“Apart from their shared interest in digital assets, there is very little common ground between the Claimant and the Defendants,” Judge Falk wrote, adding “a significant level of animosity exists which is much broader than, and the origins of which pre-date, the particular dispute before this court.”</blockquote>



For instance, the judge wrote, Wright’s claim that Bitcoin developers have the power to do what he asks is disputed.



The defendants point that Bitcoin development occurs among “a very large, and shifting, group of contributors without an organisation or structure,” and that even if they could alter the network software, miners and full node operators would just ignore such a change, as it goes against the community’s core values. At most, it would lead to further network forks, but not actually allow Wright to access the value locked in the bitcoins he seeks.



The extent of Bitcoin developers’ actual power bears directly on the key question in the case — whether the role and work of the Bitcoin developers itself creates a fiduciary duty to TTL, assuming Wright was in fact the victim of a fraudulent hack (which the developers also dispute).



“It is very hard to see how TTL&#8217;s case on fiduciary duty is seriously arguable,” Judge Falk wrote.



<blockquote class="wp-block-quote">“I do not think that bitcoin owners can realistically be described as entrusting their property to a fluctuating, and unidentified, body of developers of the software, at least in the sense and to the extent claimed by TTL.”</blockquote>



Even assuming TTL could establish the facts that it relies on in the course of a trial, the judge explained, there was no realistic prospect of establishing a breach of fiduciary duty owed by the developers to TTL.



Although the relationship between developers and bitcoin owners “generally has a fiduciary quality”, the judge wrote, their duty is not to any particular owner, to the detriment of others.



<blockquote class="wp-block-quote">“It is uncontroversial that a fundamental feature of the Networks, at least in their existing form, is that digital assets are transferred through the use of private keys. TTL effectively seeks to bypass that.”</blockquote>



The judge was not persuaded by TTL’s claim that Bitcoin developers owed a “duty of care” that was breached by allowing the network to operate in such a way that the private keys could be lost in the first place. Such a claim, she wrote, was not “realistically arguable.” They would have to have some contractual relationship with Wright or his companies. Otherwise, she noted, “by definition the potential class in this case is unknown and potentially unlimited.”



In other words, it would be ludicrous to open up bitcoin developers to legal jeopardy from anyone whose private keys were ever lost or stolen. The fact that TTL would pay them to try to gain access to the wallets further “underlines the weakness of its case,” Falk wrote.



Last December, following a trial in Florida, Wright <a href="https://cms.blockworks.co/verdict-in-craig-wright-civil-trial-100m-award-for-plaintiff-but-no-punitive-damages/" target="_blank" rel="noreferrer noopener">was found liable</a> for conversion — a form of theft — and ordered to pay $100 million to a company controlled by Ira Kleiman, the brother of Wrights’ former business partner, David Kleiman, with whom Wright once mined bitcoins.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Don’t miss the next big story – join our <a href="https://blockworks.co/newsletter?source=end" target="_blank" rel="noreferrer noopener">free daily newsletter</a>.



Follow Sam Bankman-Fried’s trial with the <a href="https://blockworks.co/tag/sbf-trial">latest news from the courtroom</a>.

Bitcoin Developers Do Not Have a Fiduciary Duty to Bitcoin Owners, Judge Rules

<div id="highlights-block_61a416f02d14a" class="highlights">
 <ul>
 <li>Wright’s defense team declared victory, as their client avoided the worst outcomes</li>
 <li>The jury was initially unable to reach agreement last week but were instructed by the judge to keep trying</li>
 </ul>
 
</div>



Jurors in the Florida trial of Craig Wright, an Australian computer scientist who claims to have invented Bitcoin, were deadlocked as recently as last Wednesday, after several days of deliberations. The judge in the case, US District Judge Beth Bloom, issued what’s known as an <a href="https://www.law.cornell.edu/wex/allen_charge" target="_blank" rel="noreferrer noopener">Allen charge</a>, instructing them to “carefully reexamine and reconsider all the evidence” in an attempt to reach an agreement. Now they have.



On Monday, the jury found Wright liable on one of the plaintiff’s claims, that of conversion — unauthorized possession of personal property,&nbsp; in this case intellectual property — and awarded $100 million in damages, according to <a href="https://storage.courtlistener.com/recap/gov.uscourts.flsd.521536/gov.uscourts.flsd.521536.812.0_1.pdf" target="_blank" rel="noreferrer noopener">court documents</a>. Notably, no bitcoin was directly ordered to be paid.



Wright <a href="https://cms.blockworks.co/craig-wright-trial-goes-to-florida-jury-which-could-award-as-much-as-189b/" target="_blank" rel="noreferrer noopener">could have been found liable</a> for a range of behavior including fraud, theft, breach of fiduciary duty, with damages potentially reaching into the billions, therefore he and his legal team see the outcome as a victory.&nbsp;



“This has been a remarkably good outcome — I feel completely vindicated,” Wright told his supporters in a <a href="https://twitter.com/JimmyWinSV/status/1467910308953997314?s=20" target="_blank" rel="noreferrer noopener">recorded video message</a>.



The jury rejected plaintiff Ira Kleiman’s claim that his deceased brother David was a business partner of Wright’s, and decided that Wright would owe nothing to the David Kleiman estate. Instead, the sole monetary award went to W&amp;K Info Defense Research LLC, a company for which Ira Kleiman is now the only registered director, but that was once a joint venture between Wright, his wife at the time Lynn Wright, and David Kleiman.



In <a href="https://cryptopotato.com/wp-content/uploads/2020/08/lynn-wright-ira-kleiman-petition-071620.pdf" target="_blank" rel="noreferrer noopener">a separate legal maneuver</a>, the ownership of the company is an ongoing matter of dispute, and Lynn Wright contends that Ira Kleiman was “not authorized to act on behalf of W&amp;K Info Defense.”



Lawyers for Ira Kleiman, see the jury award as a win for their client, even if it falls far short of what they claimed:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Kleiman v. Wright update: We are incredibly gratified the jury found Craig Wright has to pay our client, W&amp;K, $100,000,000 for the bitcoin-related assets he stole. This is a great win for our client and for justice!&mdash; Vel Freedman (@VelvelFreedman) <a href="https://twitter.com/VelvelFreedman/status/1467923812075421701?ref_src=twsrc%5Etfw">December 6, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h3 class="wp-block-heading">Satoshi Nakamoto’s bitcoin stash</h3>



The identity of Satoshi Nakamoto was not a subject of this case. It was simply assumed that Wright had access to Satoshi&#8217;s 1.1 million bitcoins, which could have been awarded as damages. The jury elected not to award any bitcoins, opting instead to levy money damages in dollars.



For Ira Kleiman to collect on the $100 million from Wright due to <meta charset="utf-8">W&amp;K Info Defense Research, he will first have to resolve the dispute over the company’s ownership. If he does retain control, and successfully turns the jury award into a definitive money judgment that Wright must pay, the question remains, where will the money come from?



Earlier in the trial, the initial judge, Judge Reinhart, <a href="https://www.govinfo.gov/content/pkg/USCOURTS-flsd-9_18-cv-80176/pdf/USCOURTS-flsd-9_18-cv-80176-9.pdf" target="_blank" rel="noreferrer noopener">found</a> that Wright submitted forged documents and offered perjured testimony related to the production of a list of bitcoin addresses under his (supposedly Satoshi’s) control.



Wright has so far failed to prove that he is in possession of, or has access to, the private keys needed to move those early Satoshi-mined bitcoins. Absent such proof, he is unlikely to persuade <a href="https://bitcoinmagazine.com/business/op-ed-how-many-wrongs-make-wright" target="_blank" rel="noreferrer noopener">skeptics</a> that he is in fact Satoshi.



Wright disputes the consensus view of what bitcoin even is. In 2018, Wright’s <a href="https://www.gemini.com/cryptopedia/bsv-what-is-bitcoin-sv" target="_blank" rel="noreferrer noopener">preferred bitcoin, BSV</a>, which stands for “Bitcoin Satoshi’s Vision”, forked from the Bitcoin Cash (BCH) blockchain, which itself forked from the original BTC chain in 2017.



Speculators evidently view the trial outcome as beneficial for the prospects of the bitcoin fork — BSV has surged 34% in the past 24 hours and now as a market cap of just under $3 billion. That remains a far cry from the market cap of BCH at about $9 billion, much less the BTC market cap of $962 billion.




<div class="tradingview-widget-container">
 <div class="tradingview-widget-container__widget"></div>
 <script type="text/javascript" src="https://s3.tradingview.com/external-embedding/embed-widget-market-quotes.js" async="">
 {
 "width": "100%",
 "height": "100%",
 "symbolsGroups": [
 {
 "name": "Indices",
 "originalName": "Indices",
 "symbols": [
 {
 "name": "INDEX:BTCUSD",
 "displayName": "BTC"
 },
 {
 "name": "COINBASE:BCHUSD",
 "displayName": "BCH"
 },
 {
 "name": "BITFINEX:BSVUSD",
 "displayName": "BSV"
 }
 ]
 }
 ],
 "showSymbolLogo": true,
 "colorTheme": "light",
 "isTransparent": false,
 "locale": "en"
}
 </script>
</div>




<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

Verdict in Craig Wright Civil Trial: $100M  Award for Plaintiff; No Punitive Damages

<div id="highlights-block_61a416f02d14a" class="highlights">
 <ul>
 <li>Wright’s defense team’s Motion for Judgment as a Matter of Law was denied on November 22, ensuring a jury decision</li>
 <li>Seven counts, including Civil Theft and Fraud, are now in a jury’s hands</li>
 </ul>
 
</div>



He claims to be the inventor of Bitcoin and the author of the original 2008 <a href="https://bitcoin.org/bitcoin.pdf">Bitc</a><a href="https://bitcoin.org/bitcoin.pdf" target="_blank" rel="noreferrer noopener">o</a><a href="https://bitcoin.org/bitcoin.pdf">in white paper</a>, under the pseudonym Satoshi Nakamoto. But the ultimate outcome of the civil trial of Dr. Craig Steven Wright, an Australian computer scientist, is unlikely to settle that mystery.



The United States District Court for the Southern District of Florida, however, accepts it as a given, by granting the plaintiff in the case standing to sue Wright in the first place. Although the prevailing view among Bitcoin proponents is that Wright’s assertion <a href="https://bitcoinmagazine.com/business/op-ed-how-many-wrongs-make-wright" target="_blank" rel="noreferrer noopener">is specious</a>, as far as Judge Beth Francine Bloom is concerned, Wright has 1.1 million bitcoins.



The jurors, slated to resume deliberations on Monday after a Thanksgiving break, are tasked with passing judgment on a more limited question: whether Wright is guilty of fraud, theft, breach of fiduciary duty, and a handful of other counts that could leave him liable for half of the bitcoin stash that he may have mined in Bitcoin’s early days.&nbsp;



The plaintiff in the case, Ira Kleiman, says that the <a href="https://cms.blockworks.co/bubbles-bitcoin-and-whats-next/" target="_blank" rel="noreferrer noopener">bitcoin,</a> while ostensibly Wright’s, rightfully belongs to the estate of Kleiman’s deceased brother David, a friend and alleged business partner of Wright’s. David Kleiman died in April 2013 at the age of 46, without ever laying hands on the fortune his brother now says should be his.



Ira Kleiman initially sued Wright in February 2018, claiming that Wright schemed to steal both the 1.1 million bitcoins and the intellectual property connected with Bitcoin’s open-source code that David Kleiman may have helped develop. At the time of the original suit, the quantity of bitcoin at issue was valued at just over $10 billion. The stakes are somewhat higher now — that much bitcoin is worth some $60 billion dollars today.



If the jury of three men and seven women finds that Wright had a partnership with David Kleiman to mine those coins, assuming they are in fact under Wright’s control, they will have to determine the value owed to Kleiman’s estate, plus any punitive damages — and the plaintiffs&#8217; lawyers have asked for plenty — bringing the total claims and damages to $189 billion. (For comparison, the world’s richest person, Amazon founder Jeff Bezos, is worth $177 billion and just the $30 billion in bitcoin alone would put Ira Kleiman among the top 50 richest people in the world, <a href="https://davidgerard.co.uk/blockchain/2021/11/13/news-craig-wright-in-court-mt-gox-settlement-bitcoin-futures-etf-reddit-community-points-miners-still-cant-sell-their-bitcoins/" target="_blank" rel="noreferrer noopener">according to Forbes</a>.)



Ira Kleiman <a href="https://www.law360.com/articles/1438959" target="_blank" rel="noreferrer noopener">has testified</a> that Wright and his brother created a company in Florida in 2011 — W&amp;K Info Defense Research LLC — which is how the Australian has ended up spending time in and out of a Miami courtroom <a href="https://news.bitcoin.com/judge-orders-craig-wright-to-physically-appear-in-florida-lawsuit/" target="_blank" rel="noreferrer noopener">since 2019</a>.



Wright denies the allegations, and says Kleiman merely helped him temporarily transfer control of the bitcoin — which <a href="https://www.law360.com/fintech/articles/1439426/bitcoin-inventor-accused-at-trial-of-lying-about-trust" target="_blank" rel="noreferrer noopener">he says</a> was purchased in 2011 from a &#8220;dodgy&#8221; Russian exchange — to keep it out of reach of Australian tax authorities.



<h3 class="wp-block-heading">A last-ditch effort to avoid a jury verdict</h3>



Shortly before closing arguments last week, Wright’s legal team filed a Motion for Judgement as a Matter of Law — basically an appeal to the judge that the plaintiffs haven’t presented sufficient evidence. Such a preemption by the judge is only an option if there “is no legally sufficient evidentiary basis for a reasonable jury to find for the non-moving party.” According to <a href="https://www.govinfo.gov/content/pkg/USCOURTS-flsd-9_18-cv-80176/pdf/USCOURTS-flsd-9_18-cv-80176-25.pdf" target="_blank" rel="noreferrer noopener">court documents</a>, there is, and the motion was denied.



The court previously <a href="https://www.govinfo.gov/content/pkg/USCOURTS-flsd-9_18-cv-80176/pdf/USCOURTS-flsd-9_18-cv-80176-23.pdf" target="_blank" rel="noreferrer noopener">denied a motion</a> from the defense for Summary Judgement, which uses a similar legal standard, so this last legal maneuver was a long shot.



Among the Wright team’s arguments was that the market value of the bitcoins at issue could not be used as the basis for the jury judgment under a Florida precedent known as the “Blockage Discount Theory” —&nbsp; that the bitcoin could not be sold without substantially adversely affecting the price. The judge disagreed.



<h3 class="wp-block-heading">To be or not to be Satoshi Nakamoto</h3>



Wright has never been able to prove that he is Satoshi Nakamoto by either signing a message using the PGP key for Satoshi’s encrypted emails, or moving any of the early Satoshi-mined bitcoin he presumably should control.



The case has yielded more sordid details of Wright’s behavior. In March 2020, a previous judge in the case, Judge Bruce E. Reinhart, <a href="https://storage.courtlistener.com/recap/gov.uscourts.flsd.521536/gov.uscourts.flsd.521536.420.0.pdf" target="_blank" rel="noreferrer noopener">reprimanded Wright</a> for forging documents and giving perjured testimony.



Gavin Andresen, who once claimed that he was personally convinced Wright was indeed Satoshi, expressed doubts on that view in <a href="https://storage.courtlistener.com/recap/gov.uscourts.flsd.521536/gov.uscourts.flsd.521536.589.3.pdf" target="_blank" rel="noreferrer noopener">a sworn deposition</a> during the trial, referring in particular to supposed proof proffered by Wright:



<blockquote class="wp-block-quote">“That gobbledygook proof that he published was certainly, deception, if not an outright lie. So at the very least, that, I consider, you know, that — he bamboozled me there.”</blockquote>



When Wright set a date to prove his claims — by transferring bitcoin known to belong to Satoshi Nakamoto to Andresen — he failed to deliver. On the day that he was due to transfer the bitcoin — May 4th, 2016 — Andresen says he was told Wright attempted suicide and was taken to the hospital.



Wright is now in a precarious position. If the jury finds in Kleiman’s favor, it is unlikely that Wright will be able to access the half a million in bitcoin — whether or not he is Satoshi — for one simple reason: It’s almost inconceivable that he would not already have done so. Satoshi’s coins have not moved for over a decade, even as the price of 1 bitcoin has gone from less than a penny to $68,521. That’s the clearest indication that Satoshi is either dead, or has lost the keys.



As <a href="https://davidgerard.co.uk/blockchain/2021/11/13/news-craig-wright-in-court-mt-gox-settlement-bitcoin-futures-etf-reddit-community-points-miners-still-cant-sell-their-bitcoins/" target="_blank" rel="noreferrer noopener">David Gerard put it</a>, “Wright could end up owing half a million bitcoins he doesn’t control to the estate of the guy he didn’t invent Bitcoin with, just because he wouldn’t admit he wasn’t really Satoshi.”



<hr class="wp-block-separator has-css-opacity"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator has-css-opacity"/>